If two projects (investments) a and b are said to be mutually exclusive, then we know that the firm:______.

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22-07-2022
Business

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If two projects (investments) a and b are said to be mutually exclusive, then we know that the firm:______.

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choprayogita110 choprayogita110 · Answer 1 · 2022-07-29T08:25:02+02:00

If two projects (investments) a and b are said to be mutually exclusive, then we know that the firm must choose to invest in either A or B, but not both.

The term "mutually exclusive projects" is typically used in the capital budgeting process where firms select one project from a range of projects based on specific criteria, with the approval of one project resulting in the rejection of the other projects.

Capital projects that compete head-to-head are said to be mutually exclusive. Projects X and Y are said to be mutually exclusive, for instance, if a management must choose precisely between completing either project X or Y, but not both of them simultaneously.

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